From where I'm sitting, I see zero inflation, a federal reserve that's happy to keep buying assets to stimulate growth, a sluggish economic recovery that's led to 1-2% growth in the US, meanwhile 50% growth in aggregate household nominal wealth since 2010 (that's from the fed's survey of consumer finances) so everyone with home equity and stocks feels rich, and bigger-than-ever VC fundraising from LPs.
I'm gonna get back to work now, but, as much as I'd like this phase of ZIRP-driven asset price inflation and general ethos of cheap money/greed to end, I just really don't see it, at least not in the next 10 years. Please, tell me I'm wrong, I want to be, I just don't see it.
Well, the growth simulation with fake money leads to sub-optimal decisions in the finance world.
I don't think policy change will come from genuine improvement of economic conditions but from let's say Deutche Bank blowing up (or something like that). Let's not forget that apparently there is ~quadrilion dollars worth of derivatives in the wild (it's hard to find reliable info)
I think we see a top in the stock market and asset price inflation in the next 6-12 months. What comes after is sort of TBD.
Eventually we'll have real growth (and likely a lot of inflation with it), but what happens between now and then, how long it takes, how bad it gets, is TBD.
From where I'm sitting, I see zero inflation, a federal reserve that's happy to keep buying assets to stimulate growth, a sluggish economic recovery that's led to 1-2% growth in the US, meanwhile 50% growth in aggregate household nominal wealth since 2010 (that's from the fed's survey of consumer finances) so everyone with home equity and stocks feels rich, and bigger-than-ever VC fundraising from LPs.
I'm gonna get back to work now, but, as much as I'd like this phase of ZIRP-driven asset price inflation and general ethos of cheap money/greed to end, I just really don't see it, at least not in the next 10 years. Please, tell me I'm wrong, I want to be, I just don't see it.